People out of work with mental health issues, such as anxiety, face losing their benefits under major reforms to the welfare system , ministers have signalled.

The Government has spelt out that it will attempt another significant overhaul of the benefits system as it seeks to bring down the ballooning cost of the welfare bill.

It comes after Labour faced criticism for increasing benefits spending by £9.3bn in the Budget, while imposing a “stealth tax” on workers by freezing income tax thresholds until 2031.

Work and Pensions Secretary Pat McFadden on Sunday gave his clearest signal to date that Labour will look to carry out further reforms to the welfare system next year when a string of government-led reviews are published.

In particular, officials will be looking at the rise in

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